It used to be that your health plan’s annual out-of-pocket maximum was more like the safety net under a high wire: You sure were glad it was there, but you didn’t actually plan to use it.
These days, it could take one measly trip to the pharmacy for you to lose your balance and fall into that net.
I’m sorry (yet again) to report that recent changes in drug pricing mean more of you will face sticker shock when you fill prescriptions, and that more of you will be on the hook for thousands of dollars as a result.
Let’s start with an important definition: Your out-of-pocket maximum is the most you would pay out of your own pocket for health care and prescription drugs before your insurance starts covering all costs. (Your monthly premiums do not count toward your out-of-pocket maximum.)
This year, out-of-pocket maximums are capped at $6,350 for an individual plan and $12,700 for a family plan.
When it comes to prescription drugs, your cost depends on the kind of plan you have and the drug you need. For instance, health plans have long charged us less for generics than brand name medications.
Now say hello to the category of “specialty drugs” that you mention.
These are really, really expensive medications that treat diseases and chronic conditions such as cancer, HIV/AIDS, multiple sclerosis, hepatitis C and rheumatoid arthritis.
As if being sick weren’t bad enough, you face potentially huge bills for your medications if your insurer places your meds into the specialty drug category.
That’s because these drugs generally don’t come with a flat dollar amount copay, but with “coinsurance,” which is a percentage of the cost of the drug – sometimes as high as 30 or 40 percent.
“Someone (who) takes a medicine that is $9,000 or $10,000 is going to hit their out-of-pocket maximum in January or February,” says Liz Helms, president/CEO of the California Chronic Care Coalition.
These specialty drug tiers first appeared in Medicare plans before migrating to the private market and employer-based plans. Now, California officials have embedded specialty tiers into nearly all plans sold through our health insurance exchange, Covered California.
For example, a “Bronze” plan sold through Covered California (the kind that has the lowest monthly premium but highest out-of-pocket cost) sets your share at $19 for a generic drug, $50 to $75 for a brand-name drug (these drugs are split into two categories, which is fodder for another column) or 30 percent of the cost of a specialty drug.
In June, Avalere Health, a health care consulting company, analyzed 123 plans offered by state health insurance exchanges, including Covered California. The analysis found, in one case, that more than 60 percent of the plans place all covered drugs for multiple sclerosis in the specialty drug tier.
If a medication you take falls into the specialty drug category, there are some steps you can take to avoid or pay a monster bill:
• Talk to your doctor about alternatives. Are there drugs that will work for you in a cheaper category?
• Shop around, says Bill Remak, chairman of theCalifornia Hepatitis C Task Force
. Some pharmacies may offer you a better deal on your portion of the bill than others.
• Do your homework. If you know you have a medical condition that requires these medications, consider buying a health plan that costs you more each month, but has lower out-of-pocket costs for drugs.
“Patients are telling me, ‘If I knew my drug was going to cost this much with this tier, I would have gone with another plan,’ ” Remak says.
• Groups such as thePatient Advocate Foundation
have compiled resources for people who can’t afford their meds, including links to organizations – and even drug companies – that provide financial aid.
Some pharmacies will go to bat for you with drug companies. Komoto Healthcare, which has four pharmacies in Kern and Tulare counties, is creating a “patient assistance program” because so many customers have been hit by huge coinsurance rates for specialty drugs this year.
“We have patients who need these medications to stay alive,” says President/CEO Brian Komoto. “We’re trying to find ways to get them through.”
State officials, too, are reacting. Spurred by a request from the California Chronic Care Coalition and complaints from consumers, the state Department of Insurance is investigating whether specialty tiers violate anti-discrimination or other laws.
“If an insurer designs coverage that singles out certain medical conditions for higher cost-sharing, that would likely violate anti-discrimination laws,” says Deputy Commissioner Janice Rocco.
Also, a measure by Assemblyman Rich Gordon of Menlo Park would cap the amount you would pay each month for prescription drugs at one-twelfth the out-of-pocket limit, or about $530. If you take one or more of these expensive specialty drugs all year, you would eventually meet your entire out-of-pocket maximum, but it wouldn’t hit all at once.
The bill is pending in the state Senate.